Quality Personnel Deployment Ratio to Sales Turnover

A

Aussiebloke

Hi there,

I am trying to find information on Automotive industry standards on the ratio between staff and turnover in a typical quality department. We assemble just in sequence ( 90 minutes from customer electronic signal order to deliver directly to customer line ) 600 carsets per day and currently have 2 people per shift in QA to support the line and perform normal quality functions as per our TS 16949 system. I am trying to motivate hiring more people, but need to motivate of course, in $ terms to paint the picture to our MD and financial controller. Is there anyone out there with a excel worksheet to show the ratio between production volume of production and staff / appraisal cost and turnover / sales ?. Possibly a comprehensive cost of quality ( prevention, appraisal etc ) can show this, but I need a ideal ratio as benchmark or norm for personnell and their cost versuss turnover / sales. I recon we are under staffed, but need to persuade our MD that we are and in world class terms where our ratio of quality cost to sales is. In other words that hiring a few more people is a good investment or insurance policy in quality assurance.Can any one help ? I hope me question makes sense, if not let me know and I will make it clearer.
 

Jen Kirley

Quality and Auditing Expert
Leader
Admin
Re: Quality personnell deplayment ratio to sales turnover

When you say "turnover", do you mean employee turnover?

There is a quality cost calculator attached in this thread, plus a link to another thread with a calculator attached.

I have a paper about turnover cost in the Reading Room: Conquering Employee Turnover Costs.

TS 16949 is silent on employee ratios, and I am not aware of an industry ideal. Numbers of personnel is a business decision, with quality of goods to the customer being the primary concern.

Let me know if you have specific questions about the calculators.
 

Stijloor

Leader
Super Moderator
Re: Quality personnell deplayment ratio to sales turnover

When you say "turnover", do you mean employee turnover?

There is a quality cost calculator attached in this thread, plus a link to another thread with a calculator attached.

I have a paper about turnover cost in the Reading Room: Conquering Employee Turnover Costs.

TS 16949 is silent on employee ratios, and I am not aware of an industry ideal. Numbers of personnel is a business decision, with quality of goods to the customer being the primary concern.

Let me know if you have specific questions about the calculators.

Jennifer,

Turnover is a (UK) term used to describe "sales."

Stijloor.
 
A

Aussiebloke

Jennifer,

Thanks for the reply and information. Yes, I do mean sales or $ turnover, sales per month or year. I am trygin to justify hiring more people, thanks Stijloor. With current staff their cost to the company is currently abour 0.5 % of sales. With the new proposed staffing the proportion would be going up to 0.8% of sales ( which I believe is reasonable ). So, hence my question, is there a general norm. I understand it is product specific. but I thought there might be a general norm for certian sections of automotive manufacturing and assembly.

Then, secondly, the ratio of heads ( staff ) to production output. Currently 1 person to every 180 parts produced. With the increase about 1 staff to every 100 parts produced. I am talking complex assemblies here. Again, it would be good to see a norm of some sort on this ratio for our industry to see how we measure and more important, for our MD to see I am not asking for the something outside of industry norm as I do belive we are currently staffed to lean. Again, I do believe my proposed head increase is resonable, if only I would measure it against some norm to illustrate the point.

The 2 above costs are currently only prevention and appraisal, I will factor the full cost of quality variables in after I have clarity on the above so I can present a complete business case.

I would appreciate any help with this in terms of some norm or guide or even a worksheet with the above in already. I have stared working on one, but I am sure there might be a super one out there !

Thanks again for the help
 
Last edited by a moderator:

Caster

An Early Cover
Trusted Information Resource
Hmmmm

Are you are trying to hire QC inspectors? If so, unfortunately the benchmark is zero. See Shigeo Shingos definitve work on this.

http://www.qualitycoach.net/shop/shopexd.asp?id=1722

Or if you are seeking to hire pure QA staff people you are on the right track with using cost of poor quality calculations. The six sigma people are expert at finding million dollar savings everywhere they look.

In the past I have justified such people by calling them solid rocket boosters, needed short term but they can fall off once on orbit. Don't worry, once you get them, anyone worth keeping can always find enough improvement activities to justify their job.
 
M

Murphys Law

Aussie- the company I work for consistently understimates the delta cost of servicing that the automotive industry demands. It needs overcapacity in people to do it properly. One quality "spill", can knock you off course big time if you do not have reserve personnel. The reserve could be working projects main part of their day but then are switched as needed.

Another thing that your MD is about to realize: every quality issue no matter how stupid, your auto customers will "demand" management presence at every daily call, weekend presence and that the MD drops everything to visit their plant the next day to get lectured on.

My management realized the pareto principle: 20% of business required 80% of their time !!! One Vp got pushed out as he spent too much time dealing quality issues instead of growing his business. After that, they created a special management structure just to buffer themselves. Top Vp, grows business in commerical and industrial space, the auto manager below him is the sacrificial offering.

Another problem with automotive is burn out. In my company, you'd be paid the same if impact in your work life and the "always urgent" attitude. I moved business groups because of this and am not looking back. My old group, recently had 1 engineer resign because she was stiffed work load wise in a group reorg. She even took a pay cut to take a better job.

So it goes.
 
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